Back to stock market basics: What is a share?

If you want to invest directly on the stock market, you need to buy shares.

So what exactly is a share? And how can you invest in them?

Read on to find out…

What exactly is a share?

A share, as its name suggests, is a portion of a company. Shares are also known as stocks.

You can buy and sell shares on the stock market or by another form of agreement.

When you buy shares, it gives you rights and a share of the profits that are in proportion to the percentage of shares you own.

By investing in shares, you’re essentially become a part owner in a business. And when buying shares you should keep this in mind. You wouldn’t part with your cash to invest in a business without doing your homework, and the same goes for investing in shares on the stock market.

You hope that by investing in shares over time the share price will rise. This means in the future you can sell your shares for a profit.